Net income dropped to $152.0 million, or 62 cents a share, from $199.6 million, or 82 cents, a year earlier, missing the Wall Street estimate of 69 cents a share.

But Nomura analyst Glenn Schorr wrote that earnings showed an "OK quarter considering the environment as revenues and assets rose."

Demand for the bank's products helped boost assets under custody by 24 percent to $4.4 trillion, while assets under management climbed 13 percent to $684.1 billion.

Northern Trust shares were up 2.2 percent to $44.60 in morning trade on Wednesday.

The bank, which offers record-keeping and asset management services to institutional investors such as pension funds, said restructuring, acquisition and integration charges totaled $22.6 million, cutting its earnings per share by 8 cents.

Like other trust banks, Chicago-based Northern Trust has been forced to waive money market fees due to low interest rates.

Bigger rivals State Street Corp (STT.N) and Bank of New York Mellon (BK.N) posted higher earnings on Tuesday. [ID:nN1E76I046] Both have grown in the past year, in part through acquisitions, an area where Northern Trust has lagged behind.

Northern Trust has often been named as potential takeover target itself, although the company has steadfastly rejected such talk.

The company has vowed to cut costs, saying "we are actively pursuing a wide array of productivity and expense management initiatives."

State Street announced plans to cut another 850 jobs, while Bank of New York Mellon said its would offer more specifics on cost-cutting later this year. (Reporting by Svea Herbst-Bayliss; editing by John Wallace)